African Central Bankers Seeking for New Mechanisms to Finance Development

The National Bank of Rwanda (BNR) will, from May 30 to June 1, 2011, host more than 100 delegates from central banks in Africa and other development partners.

The conference will take place at Hotel Milles Collins under the theme: “Financing Development in Africa: what role for Central Banks?”

The seminar aims to achieve the association of the central bank’s goals, in line with article 3 of its statutes which seeks to promote the exchange of ideas and experiences on monetary, financial and banking matters and cooperation in Africa.

Perhaps this is a little background that triggered the initiation of the African Association of Central Banks (AABC) seminars.

In order to accelerate the development of its least developed members, the United Nations, in September 2000, organised a summit that set target indicators, called the Millennium Development Goals (MDG), which the countries concerned were to achieve by 2015.

An assessment of the performances of most African countries five years from this deadline indicated that the targets would not be met as anticipated. This failure was tied to Africa’s relatively poor economic growth, induced by the lack of adequate financial allocations for the continent’s development.

In fact, while progress has been made since the Monterrey consensus to mobilise international resources for development, to reflect on alternative and innovative sources of financing and to handle debt relief, the financial resources that go to the African continent are still below the funding requirements for developing growth-propelling sectors.

The constraints identified especially concern agriculture, small and medium enterprises or industries, infrastructure and public debt.

Because of the challenges in raising funds from external sources, there is growing consensus that resources need to be generated from within the continent, and particularly from the African financial market.

This means that the financial sector, particularly central banks, is a key financing development. This explains the choice for this year’s seminar.

By making this choice, the Assembly, wants to provide answers on how African central banks can contribute to financing development in a context where consensus is building to limit the mission of these institutions, to controlling inflation and preserving financial stability.

The seminar shall aim specifically to identify innovative instruments that central banks can put in place to lift the barriers to financing development, find ways of maximising synergy in the initiatives of various players at the national and international levels, and particularly look into ways of encouraging coordination between AACB, existing or emerging African development agencies, and international institutions.

It is also expected to discuss, among other issues, how appropriate it is to redefine the mandate of African central banks, so that it includes the development dimension.

It may be recalled that while most African countries are struggling to attain the Millennium Development Goals (MDGs) by the 2015 deadline, Rwanda has confirmed it will attain them before the date.

With over 100 delegates in the country, comes the subtle benefits to the economy by especially way of boosting the hotel, tourism and airline industry.

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